Saks 3Q Earnings Triple on Sales Growth

Tue Nov 20, 2007 11:24 AM EST

NEW YORK — Retailer Saks Inc. said Tuesday its third-quarter earnings more than tripled, helped by strong sales growth and cost controls.

For the quarter ended Nov. 3, the upscale department store earned $21.6 million, or 14 cents per share, compared with $6.2 million, or 9 cents per share, a year ago — which included hefty losses from the since-sold Saks Department Store businesses.

The latest quarter includes one-time costs of 3 cents per share for severance related to its sale of Saks Department Store businesses in 2005 and 2006, asset impairments and increased income tax reserves. The charges also are related to investigations by the Securities and Exchange Commission and the Office of the U.S. Attorney for the Southern District of New York, as well as the settlement of two related vendor lawsuits.

Sales grew 14 percent to $796.1 million from $697 million a year ago.

Analysts surveyed by Thomson Financial expected profit of 16 cents per share on revenue of $781.5 million.

"Many of our merchandise categories performed very well in the quarter, including handbags, women's shoes, jewelry, men's apparel, accessories and shoes," said Stephen I. Sadove, chairman and chief executive.

Same-store sales rose 11.4 percent in the third quarter. Sales at stores open at least a year is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

"I remain optimistic about the long-term potential of the luxury sector and the Saks Fifth Avenue business in particular," Sadove added.

The company currently operates Saks Fifth Avenue which is comprised of 54 Saks Fifth Avenue stores, 49 Saks Off 5th stores, and saks.com. The company also operates Club Libby Lu specialty stores.

Shares rose 3.3 percent, or 66 cents, to $20.79.